Economy of Brazil

7 Pages

1766 Words

To do business with Brazilians it is important to understand some of their past, their wide variety in culture, and that Brazil is not Latin America. If the United States is considered as the melting pot; then, Brazil should be considered the melting cauldron. Brazil is the 6th most populated country in the world in which 95% of its population lives near the eastern coast on 10% of the land. Brazil has 165 million citizens and is home to the largest Japanese community outside Japan. Brazilians come from the three major racial stocks of the world: American Indian, African Negro, and Caucasian European (Video: Doing business in Latin America: Brazil; Brazil: A study in development Progress/ Stefan H. Robock, 1975). .

Economy of ups and downs.

Brazil's economy is the largest in South America and is also the 10th largest in the world. .

This economy is in a continuous cycle of booms and busts. Stability is not a strong suit for this economy. An investor could make a lot of money soon and they could also lose it as quickly as it was made. In the words of a Brazilian businessman "Brazil is like a roller ouster, sit back and enjoy the ride” (Video: Doing business in Latin America: Brazil) .

During the fall of the Asian market, inflation reached an all-time high of 8500%. People used to buy everything as soon as they received their paycheck. The value of the Real got devaluated so much, that the value would decrease almost daily. Employees also expected a raise every month to keep up with inflation. .

In the mid 1990's the HEOFF ("Real plan”) plan cut the inflation to single digits and put the citizens back in the world market (www.presidencia.gov.br) .

Agriculture has vital role in the economy with 1/3 of the workforce producing coffee, oranges, and bananas. Manufacturing was based on government protectionism which started after WWII. Protectionism from imports made the Brazil had a closed market which led to a very inefficient manufacturing industry.